* MSCI world equity index up 1 percent at 197.70
* $300-billion plus rescue plan for Citi boosts shares
* Oil down, yen up as economy concerns linger
By Natsuko Waki
LONDON, Nov 24 (Reuters) - World stocks rebounded on Monday from last week's 5-1/2 year low after the U.S. government unveiled a $300 billion-plus rescue package for banking giant Citigroup, while oil slipped again on demand concerns.
Washington's plan -- its biggest rescue of a bank yet -- could become a model for other U.S. banks expected to face growing losses from the credit crisis which began in 2007.
However, oil fell and the low-yielding yen rose as the plan failed to erase worries about the impact of deteriorating major economies on corporate profits and consumer consumption.
Monday's closely-watched IFO survey offered the latest evidence of gloomy economic conditions, with the German business climate index falling to 85.8, its lowest since February 1993. "The fact that they're (Citigroup) going to be provided with government support is a major boost," said Peter Dixon, economist at Commerzbank. "(But) everyone's got every right to feel fairly jittery. The very fact that the government is stepping in is a very bad sign, it shows how overstretched the financial system was." MSCI world equity index was up 1 percent, having hit a 5-1/2 year low on Friday. Emerging stocks bucked major markets to fall 0.9 percent, led by falls in Chinese stocks.
Citi's shares rose nearly 40 percent in Frankfurt.
U.S. crude oil fell 1.8 percent at $49.04 a barrel.
The IFO survey showed that German corporate sentiment fell by much more than expected in November to its lowest level since February 1993 as firms grew more gloomy about the business outlook.
The yen rose 0.6 percent to 95.29 per dollar as investors shunning risky assets sought the low-yielding currency. The dollar rose 0.1 percent against a basket of major currencies.
"Once again, the market is faced with a weekend hangover where it has to decide whether it should feel relief that something has been done, or renewed unease that something had to be done in the first place," Calyon said in a note to clients.
The December bund future was steady.
(Additional reporting by Rebekah Curtis; Editing by Toby Chopra)